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Dropbox Announces Fiscal 2025 First Quarter Results

1. Q1 revenue decreased 1.0% year-over-year, totaling $624.7 million. 2. GAAP operating margin improved to 29.4%; non-GAAP margin at 41.7%. 3. Net cash provided by operating activities was $153.8 million, down from last year. 4. Paying users remained flat at 18.16 million; slight decrease noted quarter-over-quarter. 5. New features in Dash aim to address customer pain points and boost engagement.

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Why Neutral?

While the revenue decline is concerning, increasing margins and net income could stabilize investor sentiment.

How important is it?

The financial results indicate operational stability but show a concerning revenue trend, influencing investor sentiment.

Why Short Term?

Immediate results may influence trading but are less likely to impact long-term valuations given ongoing developments.

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SAN FRANCISCO--(BUSINESS WIRE)--Dropbox, Inc. (NASDAQ: DBX) today announced financial results for its first quarter ended March 31, 2025.

“We’ve had a productive start to the year improving the Dash user experience and making targeted investments to simplify and strengthen our core FSS product,” said Dropbox Co-Founder and Chief Executive Officer Drew Houston. “More recently, our Spring launch introduced key new Dash features designed to solve specific pain points our customers face, including advanced video and image search and deeper integrations with essential apps. While the macro environment remains fluid, we’re focused on refining our execution and increasing our operating efficiency as we continue to capitalize on the Dash opportunity and create value for shareholders.”

First Quarter Fiscal 2025 Results

  • Total revenue was $624.7 million, a decrease of 1.0% from the same period last year. On a constant currency basis, year-over-year revenue decreased by 0.6%.(1)
  • Total ARR was $2.552 billion, a decrease of 0.2% from the same period last year. On a constant currency basis, ARR was flat.(2)
  • Paying users were 18.16 million, flat compared to the same period last year. Average revenue per paying user was $139.26, as compared to $139.59 for the same period last year.
  • GAAP gross margin was 81.3%, compared to 83.2% for the same period last year.
  • GAAP operating margin was 29.4%, compared to 22.7% for the same period last year.
  • GAAP net income was $150.3 million, compared to $132.3 million for the same period last year.
  • Net cash provided by operating activities was $153.8 million, compared to $175.5 million for the same period last year.
  • GAAP diluted net income per share attributable to common stockholders was $0.51, compared to $0.39 in the same period last year.(4)
  • Cash, cash equivalents, and short-term investments ended at $1,180.0 million.
(1) We calculate constant currency revenue growth rates by applying the prior period's weighted average exchange rates to current period results.
(2) We calculate total annual recurring revenue ("Total ARR") as the number of users who have active paid licenses for access to our platform as of the end of the period, multiplied by their annualized subscription price to our platform.

Financial Outlook

Dropbox will provide forward-looking guidance in connection with this quarterly earnings announcement on its conference call, webcast, and on its investor relations website at http://investors.dropbox.com.

Conference Call Information

Dropbox plans to host a conference call today to review its first quarter financial results and discuss its financial outlook. This call is scheduled to begin at 2:00 p.m. PT / 5:00 p.m. ET and can be accessed by using the web link at http://investors.dropbox.com.

About Dropbox

Dropbox is the one place to keep life organized and work moving. With over 700 million registered users across approximately 180 countries, we're on a mission to design a more enlightened way of working.

Use of Non-GAAP Financial Measures

Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data...

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